In the 8 months of 2023, the total equity turnover, excl. blocks amounted to EUR 179.9m, with an average daily turnover of EUR 1.1m. Furthermore, the most traded stocks were Span, Podravka, and Valamar Riviera, which on average, accounted for 31% of the total equity turnover on the exchange.

In this overview, we took a look at the development of the equity turnover on the Zagreb Stock Exchange, how it has changed in terms of the average daily turnover, as well as the most traded stocks on the exchange during the 2023 period.

Equity turnover by months on ZSE (January 2023 – August 2023, EURm)

Source: ZSE, InterCapital Research

As we can see, the turnover on the exchange (excl. blocks) has been all over the place in 2023, but the trend in the last couple of months has led to an increased intensity of trading. However, besides the overall turnover, it is prudent to also look at the average daily turnover, as the working days and as such the time to trade vary between the months. The average number of working days amounted to 21, and the total amounted to 167.

Average daily turnover each month on the ZSE (January 2023 – August 2023, EURm)

Source: ZSE, InterCapital Research

The average daily turnover, as well as the overall turnover picked up in June 2023, peaking at EUR 1.66m in August 2023. What is also interesting is that there has also been a reduction in the prevalence of block trades in the total turnover. In fact, in the period from 2017 to 2022, the block trades on average, accounted for 23.7% of the total equity turnover, peaking in 2022 at 36.8%. On the other hand, in the 8M of 2023, blocks accounted for 6.6% of the total equity turnover, on average.

Turning our attention to the most traded companies, Span recorded a total equity turnover of EUR 22.9m, accounting on average, for 12.7% of the total equity turnover. Following Span there is Podravka at EUR 21.5m, accounting for 11.9%, Valamar Riviera, at EUR 15.3m, or 8.5%, Zagrebačka banka at EUR 13.3m, or 7.4%, and Hrvatski Telekom, at EUR 11.6m, or 6.4%.

Top 3 most traded stocks by months (January 2023 – August 2023, EURm)

Source: ZSE, InterCapital Research

Finally, turning our attention to stocks which not just in terms of volume but also consistency and time turned out to be the companies with the largest investor interest, Span was the most traded stock for 4 out of 8 months, followed by Podravka and Hrvatski Telekom, with 2 months each, respectively. The 2^nd most traded stock on a monthly basis was Valamar Riviera, which recorded 4 out of 8 months of being the most traded stock, followed by Span, with 2 months, as well as Zagrebačka banka and Podravka with 1 month each, respectively. Finally, Zagrebačka banka was the 3^rd most traded stock in terms of months, recording 3 months of being the 3^rd most traded stock, followed by Valamar Riviera with 2 months, followed by Adris Grupa (pref.), HPB, and Turisthotel, with 1 month each, respectively.

YTD returns of select Croatian companies* (2023, %)

Source: Bloomberg, InterCapital Research

*Includes all the companies that were at least once in the top 10 most traded companies during 2023

In terms of how this reflects on returns, Podravka recorded an increase of 75%, followed by HPB at 73%, Končar at 65%, and AD Plastik at 50%. The most traded company, Span, recorded an increase of 41%, albeit it should be noted that the stock has been on the rise for most of the year, only starting to decline recently. Most of the companies that were the most traded recorded double-digit returns, excluding only Valamar Riviera, Arena Hospitality Group, Atlantska Plovidba, and Ericsson NT. Ericsson NT is the only one of these companies to record a negative return.

At the end of August 2023, BET recorded an increase of only 0.2% MoM, and 13.7% YTD, amounting to 13,256.21 points. At the same time, the total equity turnover amounted to EUR 241.9m, a decrease of 59% MoM.

Yesterday, the Bucharest Stock Exchange published its latest trading activity report, for the month of August 2023. Taking a quick look at the highlights, in the first 8 months of 2023, the total trading value of all types of financial instruments reached an all-time high of EUR 5bn (RON 24.5bn). This would mean that it exceeded the previous 2 all-time highs, the one for the full year 2021 (RON 20bn), and the one for the full year 2022 (RON 23.2bn). Furthermore, 1 million transactions were exceeded at the BVB, for the first time. Lastly, the Romanian capital market recorded an increase of 13.7% (BET), and 17.8% (BET-TR), which includes dividends, by the end of August 2023.

During the first 8 months, the top 5 most traded companies were Hidroelectrica (RON 2.08bn of turnover), Fondul Proprietatea (RON 1.4bn), Banca Transilvania (RON 1.18bn), OMV Petrom (RON 1.07bn), and Romgaz, with a turnover of RON 418m. In terms of the overall equity turnover, it amounted to EUR 241.9m, representing a decrease of 59% MoM, but an increase of 64% YoY. This would also mean that the average daily turnover amounted to EUR 11m in August 2023, vs. EUR 28.3m last month, and EUR 6.7m in the same month last year.

Performance of BET constituents in August 2023 (MoM, %)

Source: Bloomberg, InterCapital Research

Taking a look at the performance of the BET constituents, in August 2023 on a monthly basis, the largest increase was recorded by BVB, which grew by 16%, followed by OMV Petrom at 13%, Transelectrica at 12%, and Transgaz and TeraPlast, both at 9%. Out of the observed companies, 15 recorded an increase, while 5 recorded a decrease. Fondul Proprietatea recorded the largest decrease, of 79% MoM, but the reason for this is quite specific. App. 80% of the assets under management of Fondul Proprietatea were that of Hidroelectrica. After the IPO, Fondul raised over EUR 10bn. Afterwards, a vote was held on the distribution of this money, in the form of a special dividend. As this dividend had a significant DY (90% prior to the date of the announcement), the drop in price after it was paid out was expected.

YTD performance of BET constituents* (2023, %)

Source: Bloomberg, InterCapital Research

*Hidroelectrica’s price change as of the IPO in July 2023

In terms of the YTD performance, the largest increase was recorded by TTS at 78%, followed by BVB at 73%, Aquila at 60%, Purcari at 47%, SFG at 44%, and OMV Petrom at 43%. In fact, out of all the observed companies, only Fondul Proprietatea and TeraPlast recorded YTD decreases, of 80% and 10%, respectively. As such, 2023 has thus far proven to be a quite good year of returns for the Romanian capital market.

InterCapital remains dedicated to making regional investments more attractive with support on transparency and liquidity, and we thank our partners for supporting us in achieving this goal.

We are proud to announce that NLB Group has renewed its Market-Making agreement with InterCapital Securities.

Being a market maker means that InterCapital continuously puts both bid (buy) and ask (sell) orders on NLBR shares at a pre-defined spread. The idea behind this concept is to enable investors to buy or sell the shares, up to a certain size, at any time within a reasonable volatility range. Under the terms of the agreement, the market-making status will be extended from 1 October 2023, up until 30 September 2025.

InterCapital also provides market-making services in Croatia, covering 10 blue-chip companies and 3 ETFs, including the recently launched 7BET ETF. Besides Croatia, InterCapital offers market-making services to 5 other Slovenian companies besides NLB, as well as 2 ETFs listed on LJSE. These include Krka, Petrol, Sava Re, Triglav, and Cinkarna Celje.

We are proud of having earned the Company’s trust and we will do our best to continue providing the best service possible.

NLB share price (2020 – 2023 YTD, EUR)

Source: LJSE, InterCapital Research